Microsoft moved on Monday to allay customers' privacy concerns after Windows 98 was reported to be providing personal information to databases without users' knowledge.

In an open letter published on Microsoft's Website, Yusuf Mehdi, director of Windows Marketing, said Microsoft was taking steps to address privacy issues. In particular, it would:

• Modify the Windows 98 Registration Wizard feature in an update of the operating system. This would not automatically send a hardware ID unless the user checked the option to send hardware information to Microsoft.

• Provide a software tool for download, allowing users to delete hardware registration information from the Windows registry.

• Investigate whether any hardware ID information is stored on Microsoft databases and purge where found.

Phar Lap flap

The flap has been caused by Massachusetts-based Phar Lap Software.

Its president, Robert M.Smith, alerted Microsoft last week that documents created by its Word word-processing and Excel spreadsheet programs had unique numbers embedded in them which could identify the author's computer.

He later discovered that the number, known as a Globally Unique Identifier (GUID), was being transmitted to Microsoft by the Windows 98 registration wizard, which allows customers to register for support and updates.

He alleged that a digital fingerprint was being created to match documents to particular computers and that Microsoft was building a database of personal information.

Privacy lobby objects

The privacy lobby then became involved, with Junkbusters issuing a privacy advisory to consumers on Sunday, warning of the GUID issue.

"Junkbusters is not currently calling for a boycott of Microsoft products because Microsoft says it is changing its practices and it claims that the damage it has done to people's privacy was not wilful," it said.

"Given their inglorious history on privacy and the credibility gap demonstrated in the trial against the Department of Justice, we have to question the sincerity of Microsoft's statements."

Microsoft responds in the letter that there is no linkage between the number in Word and Excel documents and the registration process.

It says it values users' privacy and is playing a leading role in the industry on privacy policy by supporting such initiatives as TrustE.